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Botched County Contract Awarded Before Software Finished

Software for the Multnomah County, Ore., Department of Assessment, Recording & Taxation department was never finished, but still cost taxpayers $2 million.

by KELLY HOUSE, MCCLATCHY NEWS SERVICE
/
March 25, 2014

Multnomah County, Ore.'s contract with Colorado Customware, Inc., was a gamble from the start.

When the company submitted its $3.8 million bid in August 2008 to replace the county's outdated Department of Assessment, Recording & Taxation software, it hadn't even finished developing the product Multnomah County would use instead.

By the time county leaders canceled the contract last spring, it was becoming increasingly clear the software would never get past the development phase.

County officials have refused to discuss the botched contract that left taxpayers out $2 million, with no new software system to show for the expense. However, public records detailing the process show Colorado Customware didn't have a reliable product ready when they entered the pool of five qualifying bidders.

Initially, Colorado Customware ranked in the middle of the pack of bidders to replace the department's 16-year-old assessment and taxation software. The company fell behind St. Louis-based MSGovern and True Automation of Plano, Texas.

But as county officials continued vetting potential contractors, Colorado Customware rose to the top. The pool narrowed to Colorado Customware and MSGovern; Colorado Customware won out after it scored well during product demonstrations. Companies were rated on the software's functionality and ease-of-use, as well as their plan to install and roll out the new product.

Colorado Customware also estimated it could deliver the product for $3.8 million, less than MSGovern's $4.4 million bid.

Only two of five evaluators left comments on the score sheets they used to rank companies during the on-site demos. One wrote that Colorado Customware's product was "intuitive and appears to have easy navigation." Another gave the company good overall reviews, but noted that the tax collecting software was "still in development."

In its initial proposal, Colorado Customware touted its software as a bargain.

"Once you have purchased software from CCI, you will never have to re-purchase it again, even if our products become enhanced, upgraded or re-written," the proposal stated. "To date, CCI has never had a client go-live and leave our system."

The company planned to set Multnomah County's "go-live" date for October 2010. But turning the demos into useable software proved difficult.

By 2011, months after the project was supposed to be complete, county officials noted "consistent performance and delivery problems," assistant county attorney Lindsay Kandra told county commissioners earlier this month.

By then, county taxpayers were already out $2 million. Colorado Customware continued to work on the software for two more years, then refused to do any more work unless the county paid more. Instead, county officials terminated the contract last May – four years into a project that was supposed to take less than two.

In July, Colorado Customware declared bankruptcy. The company owed more than $10 million in debt to many creditors, including several other local governments with contracts that yielded no useable software.

Multnomah County attorneys go the go-ahead earlier this month to sue Colorado Customware for the lost $2 million, plus reimbursement for other costs. But because it's illegal to sue a bankrupt company, they won't be filing a suit anytime soon.

Meanwhile, the county is still using the outdated Tyler Technologies software that the Colorado Customware product was supposed to replace. Contract negotiations to upgrade to Tyler's newer "Orion" software are ongoing.